Correlation Between SSC Technologies and Appfolio
Can any of the company-specific risk be diversified away by investing in both SSC Technologies and Appfolio at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SSC Technologies and Appfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSC Technologies Holdings and Appfolio, you can compare the effects of market volatilities on SSC Technologies and Appfolio and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SSC Technologies with a short position of Appfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSC Technologies and Appfolio.
Diversification Opportunities for SSC Technologies and Appfolio
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SSC and Appfolio is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies Holdings and Appfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appfolio and SSC Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SSC Technologies Holdings are associated (or correlated) with Appfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appfolio has no effect on the direction of SSC Technologies i.e., SSC Technologies and Appfolio go up and down completely randomly.
Pair Corralation between SSC Technologies and Appfolio
Given the investment horizon of 90 days SSC Technologies is expected to generate 2.36 times less return on investment than Appfolio. But when comparing it to its historical volatility, SSC Technologies Holdings is 2.07 times less risky than Appfolio. It trades about 0.07 of its potential returns per unit of risk. Appfolio is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11,207 in Appfolio on August 31, 2024 and sell it today you would earn a total of 14,168 from holding Appfolio or generate 126.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSC Technologies Holdings vs. Appfolio
Performance |
| Timeline |
| SSC Technologies Holdings |
| Appfolio |
SSC Technologies and Appfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSC Technologies and Appfolio
The main advantage of trading using opposite SSC Technologies and Appfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSC Technologies position performs unexpectedly, Appfolio can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Appfolio will offset losses from the drop in Appfolio's long position.| SSC Technologies vs. Aspen Technology | SSC Technologies vs. Bentley Systems | SSC Technologies vs. Tyler Technologies | SSC Technologies vs. Blackbaud |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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